Bono's investment startup, The Rise Fund, is diving into fintech, with its maiden investment in the segment going to a robo advisor. The Rise Fund, of which Bono is a co-founder alongside Bill McGlashan and Jeff Skoll, is backing micro investing app Acorns Grow Inc., taking a page out of the books of Ashton Kutcher (who incidentally said that the best investment he ever made was in relationships) and Kevin Durant, both of whom have equity positions in the fintech startup.
The Rise Fund may be a startup, but it has the backing of private equity shop TPG Growth, which oversees more than $8 billion. Rise, with Bono's help, has raised a war chest of $2 billion to invest with a focus on projects that are designed to have a positive impact society and generate profits for the fund, all of which fits the persona of musician/activist/investor Bono. Kind of sounds like Vitalik Buterin's blockchain. Meanwhile, in addition to the U2 frontman, the Rise board roster extends to the likes of Richard Branson.
Acorns' chief Noah Kerner said of the Rise backing:
“I believe in the American Dream; in the idea that no matter where you start, anyone can grow wealth. This investment and support from TPG’s Rise Fund, which has brought together some of the world’s most influential thought leaders committed to driving social change, will help us further deliver the tools, knowledge and inspiration to champion that idea.”
Newport, Calif.-based Acorns is a digital wealth manager that appeals to millennials in particular, comparable to fintech Betterment but on the micro level, boasting AUM of $500 million across millions of accounts and account sizes as low as USD 175.
US-based Acorns likely appeals to millennials for its ease of use and low fees. Users connect their cards that they use for everyday payments onto the Acorns platform. From there, they go about their daily spending habits, and the spare change from those investments is automatically directed toward investments by Acorns across thousands of stocks and bonds. Considering that Bono transcends generations, his affiliation with Acorns should raise the micro wealth management app's profile even higher.
It's no wonder that Bono's Rise is drawn to robo-advisory, with Cerulli Associates having predicted the size of the digital-advice market of $220 billion at year-end 2017, up almost threefold from the previous year's levels.
NBA All-Star and MVP Kevin Durant of the Golden State Warriors has similarly been drawn to fintech and through his tech-focused investment firm counts Acorns as well as on-demand delivery service Postmates in the portfolio.
In addition to celebs, Acorns has the backing of other well-known backers including fellow fintech PayPal. The Acorns app is currently being integrated into PayPal, which stands to bolster the latter company's profile among a field of growing payments companies. Acorns acquired Portland-based Vault, which allows app users to direct some of their paychecks into a retirement savings account.
Featured image from Shutterstock.